11th November 1999 Archive

Nortel Networks rolled out what it calls 'New World' routing and IP software in New York on Monday, with hopes that a wide variety of servers, PCs, consumer gizmos, set-top boxes and processors will soon become Internet compatible under their Open IP Environment.

Women would prefer to ditch their microwave ovens than be parted from the Internet, according to a survey by women's portal Women.com. In fact, women love the Net so much 70 per cent of those surveyed said they couldn't imagine life without it. The research also discovered that the average woman online is more likely to be married than single, in her thirties, and with a generally high household income. Seventy-three per cent of women regularly access product and service information online and more than 50 percent of women say "fast and easy solutions" are key to online commerce. "Women have created an online revolution that has closed the Web's gender gap, and have become the dominant force on the Internet today," said Gina Garrubbo, executive VP, Women.com. ®

Datatec saw profits rise 159 per cent thanks to "staying nimble" and an aggressive acquisition strategy. The South African group posted profit of R196 million (£19.6 million), on sales of R5.6 billion (£561 billion), compared to R2.6 billion (£260 billion). More than 90 per cent of the technology and services company's profit was generated outside South Africa, mainly in the US and Europe. Datatec has spent the last two years buying foreign firms to expand its world presence. Its existing cache of UK companies includes Logical Networks, Blueprint and Network SI. It has bought eight companies in the past six months in Singapore, Australia, Switzerland and Germany. It also announced the £19 million acquisition of 75 per cent of UK-based Mason Group, a telecommunications consultancy. More acquisitions are in the pipeline, said Jens Montanana, Datatec founder and executive chairman. "We will continue to expand and position more and more of our business abroad." "Results have been driven mainly by organic growth, generated by businesses that existed before this operating period," he said. He put the secret of the company's success down to: "staying nimble as a services company, tapping into areas that grow at above average rates". Datatec also said it would float its US subsidiary Westcom, a networking distributor, in next year's first quarter. It plans to use the cash raised to fund more acquisitions in the same area. ®

Web shoppers will spend between $12 billion and $15 billion (£700 million to £900 million) over Christmas according to Ernst & Young - almost double previous estimates, and at least treble the amount spent last year. Two-thirds of the 1,200 US consumers surveyed said they expected to do at least 10 per cent of their Christmas shopping online - up from 23 per cent last year. Also, while men made up the vast majority of online shoppers last year, women's natural predilection has come through with 58 per cent of those Net shopping this year expected to be from the fairer sex. CDs and books remain the firm online favourites but other goods such as clothes are catching up fast. ®

BT is to form a £123 million ($200 million) joint venture with Web directory outfit, LookSmart, as part of a deal to provide portal services and exploit emerging markets in Europe and the Far East. The deal will build on BT's base of more than 31 million Internet and wireless customers, and LookSmart's Web navigation directories already used in some 17 countries around the globe. According to BT, the venture is the telco's "first extensive international Internet deal". In a statement, the company said the deal would provide Web directories and other content, Internet communications and ecommerce services to consumers. The venture will also offer the business market syndicated services through ISPs and other partners. The agreement does not cover Britain. Evan Thornley, co-founder and CEO of LookSmart said: "LookSmart and BT have established a new model that combines Web navigation with access on a global basis. "We estimate that the portal market in Europe and Asia will overtake that of the US in the next five years. Together, we are prepared to commit up to $200 million to capture the leadership position in these markets. San Francisco-based LooksSmart already provides Web directory services to portals including MSN, Netscape, AltaVista, @Home, as well as 280 ISPs. ® For more money news tune into Cash Register and turn on to our daily Net Finance News

Bill Clinton isn't worried, nor are fund managers, so why is the US building a £25 million disaster bunker and pulling its diplomats out of countries prone to the millennium bug infestation? Like the passengers on a troubled plane we are constantly (too frequently?) being reassured that the millennium bug won't strike. Bill Clinton has told his fellow Americans not to bother hoarding food in the first ever online chat by a US president (gasp!). Not only that but two-thirds of fund managers worldwide say the UK and US are completely prepared. That's all right then. But look out the window - is that smoke coming out the engine? Was that a piece of wing that has just dropped off? The US government has built a £25 million bunker just two streets down from the White House which will "monitor" the effect the bug has across the world. It has also recalled its officials from Russia and other countries it believes will be hit hard come the year 2000. The undeniable fact remains that not even Big Bill has a clue what's going to happen. That is little comfort to Business Post, however, whose shares have fallen nearly 10 per cent because no one is buying computers and so no one needs them shipped anywhere. ®

Bill Gates yesterday claimed that Microsoft was "willing to go a long way to address the government's concerns," and then effectively ruled out a negotiated settlement by declaring Microsoft unshiftable on two key points. Speaking to a Microsoft shareholder meeting about the current antitrust trial situation, Gates stressed that "if we can't add Internet support, we can't add any new features." He then added: "If we can't define the user experience of Windows so that all Windows machines operate the same way, then the Windows brand is meaningless." Microsoft's determination to defend both of these points is likely to result in a fruitless outcome to talks over a negotiated settlement to the case. Gates clearly intends to continue to defend the integration of the browser in Microsoft's operating systems and to continue to add and integrate new Internet-related features. That stance doesn't altogether rule out the possibility of Microsoft agreeing to offer unbundled versions of its operating systems as a sop to the DoJ, but it does close the door on any agreed settlement whose terms required Microsoft to entirely unbundle the browser. If, for example, the DoJ wanted Microsoft to provide a level playing field and offer a choice of no browser or one of several browsers, Microsoft would not agree, because the solution would be entirely the reverse of what Gates was saying yesterday. The other stake in the ground relates to the OEM market. Microsoft tightened its control of what PC manufacturers could and could not do with Windows (largely, they couldn't) with the introduction of its Windows Experience programme a few years back. The Windows Experience effectively extended Microsoft's definition of its own intellectual copyright to include installation procedures, the look and feel of the initial screens the OEMs were allowed to present to their users, and the programs the machines were permitted to run during the installation procedure. Testimony from various companies, including Compaq, Gateway and HP, showed how this has destroyed the PC companies' ability to differentiate their products. Microsoft's own internal documentation made it clear that it was an exercise in control, plus something of a land-grab. Desktop real estate is valuable, and if anybody was to derive revenue from it, it was going to be Microsoft, not the OEMs. More recently Microsoft has loosened its control a little, but Gates' words make it clear it doesn't intend to go much further. He says: "If we can't define the user interface of Windows, so all Windows machines operate the same way, then the Windows brand becomes absolutely meaningless." That rules out even relatively minor changes that the DoJ would reject out of hand as being too weak. OEMs could be allowed, as Gateway and HP wished, to put their own look and feel onto the initial install sequence, and perhaps even (as Gateway in particular wished) to develop their own alternative user interface. But Gates has made it clear Microsoft won't shift even that far. Microsoft therefore (as could be expected) won't be agreeing to more radical changes. If the judge determined that opening up Windows source code was a viable remedy, then he major PC OEMs would be prime candidates to be given access to it. They would be able to work with a common code base, and could use their new-found knowledge of what's inside and new-found ability to do something with it to differentiate their products. To some extent this could be seen as a minor remedy, because the PC companies in general wouldn't want to get into heavy engineering, but its effect would be to roll back Microsoft's definition of its own IP to approximately where it was when Dos was the OS. But Microsoft will only accept that at gunpoint. By some strange coincidence, however, this and other more drastic measures that are being talked of now could make the fears Microsoft expressed in justification of the Windows Experience come true. The company line, as expressed by Steve Ballmer among others, is that if Microsoft does not police how Windows looks and works at first boot, Unix-style schisms and chaos will ensue. This was of course laughable at a time when OEMs were arguing over being allowed to display Netscape icons and to use their own help software, but if the source winds up being parcelled out to several different companies, it looks a lot more credible. ® Complete Register Trial coverage

In 20 years Microsoft has spent more than $14 billion on more than 140 acquisitions and investments, according to an investigation of SEC filings, corporate documents and industry sources conducted by G2 Computer Intelligence. The resulting report, The Microsoft Empire: Roots and All, considers the question of whether Microsoft innovated or bought its way to success. The vast majority of Microsoft's investments have taken place in the last few years, says G2, noting in particular "Redmond's latest penchant has included a slew of minority investments and joint ventures, enough to ensure (or control) the loyalties of companies that remain independent entities." Microsoft's own published information leaves out a lot of detail, and the company's investor relations site doesn't cover the first 15 years at all. That's not when the big money was spent, but G2 notes that it was the "critical period when, among other things, it picked up the technology for Dos, VB and various pieces of Windows --the roots of its eventual dominance of the desktop." We haven't seen the report as yet, but G2 has a good track record of digging in this kind of area, so it's probably money well spent at $45. It can be ordered online here. ®

Red Hat yesterday announced - or rather Oracle announced on its behalf - that the next release of Red Hat Linux will integrate support for Java support, provide a journaling file system and add the Motif GUI.

Transmeta will launch its first processor on 19 January 2000, according to Germany's c't magazine, and not at Comdex next week after all. The terse c't report claims the chip is codenamed Crusoe because it's aimed at the notebook market. In other words, we're talking about a low-power chip, which while nonetheless welcome does seem a tad less groovy than most of the rumours leaking (or purporting to leak) out of the mysterious silicon company have suggested. That said, Transmeta's filed patents hint at technologies to make applications run considerably faster than they do now, at a given clock speed. So if you're willing to run them at standard speed, you could, we imagine, run the chip rather more slowly than your average PIII and thus make a big saving on power. Suggestions that Transmeta would reveal all at Comdex came from the company's best-known employee, Linus Torvalds. At the end of September he told reporters in Helsinki, the lad's home town, that Transmeta was thinking of saying something about its chip at Comdex. Or perhaps saying when it would say something about its chip. Or not. ®

A school teacher's four-month sentence for downloading child porn from the Internet has been upheld by the Court of Appeal, setting a legal precedent. The sentence had previously been quashed on appeal but the judges ruled that downloading or printing indecent material constituted an offence. Jonathan Bowden said he was not aware he had done anything illegal and the material was for personal use. He also admitted printing out some of the downloaded images - something the Court decided was equivalent to "making" photographs. Bowden was therefore taken to be guilty under the 1978 Protection of Children Act. However, the judges also ruled the sentence was wrong in principle and excessive and reduced it to a 12-month conditional discharge. The case started when Bowden took his PC's hard drive in for repair. Staff found indecent material and the police were called. Mirroring Gary Glitter's situation, the police then arrested him following the seizure of a computer and some floppy disks. ®

BT's CEO, Sir Peter Bonfield, today ruled out any plans to introduce "free" local calls in Britain saying that "there's no such thing as a free lunch". Interviewed on BBC TV this morning, he said BT wanted to create a range of different pricing models to suit the needs of different Net users. His comments came on the day BT announced its Q2 earnings. For the three months to end-September the group made pre-tax profits of £890 million, compared to £1.878 billion last year. ®

Cybersquatting looks almost certain to be banned following the passing by the US House of Representatives of a Satellite Viewers Bill which had attached to it a cybersquatting bill. This bill is unrelated to one that was bogged down in a House-Senate conference, although the terms are very similar. Where a trademark is infringed in a domain name, the trademark holder would be able to seek up to $100,000 in damages against the cybersquatter. The most vociferous advocate was the Motion Picture Association. Senator Orrin Hatch, who was incensed when he was offered a domain name including his name, was a leading supporter of including the protection of the names of individuals. No damages would be payable in such cases, but a legal action is likely to succeed. International cybersquatting will remain a problem despite the quaint expectation that the legislation will allow action in the country where a domain name is registered, as though US law applied outside the US. However, the protection should solve most of the problems. It is probable that there will be some strong-arming against genuine sites that have coveted names, if there is the slightest possibility of an infringement. Many small US domain name holders are expected to be threatened by intimidating lawyers, and some would no doubt surrender the name rather than bear the cost of defending an action. ®

Polls conducted on the Internet are prone to being invaded by afficionados who wish their view to prevail. There are, of course, other ways to give an incorrect picture of sentiment, such as miscounting the voting, or -- as has just happened -- having a bug that does not allow certain categories of voters to express a view. As pointed out by Joeri Sebrechts ("How about that MSNBC?" in The Register Bulletin Board), an MSNBC poll after Judge Jackson's findings strangely did not allow Netscape Navigator users to vote. Nobody expects MSNBC to be particularly anti-Microsoft, but the service was badly caught out when it asked whether readers agreed that Microsoft had monopoly power and that consumers have been harmed, and what should happen. As is so often the case, the form of the questions was technically flawed, but that was not the major problem (only one remedy could be suggested, for example). Netscape users found they could not vote because the voting buttons, which appeared fleetingly, did not render properly. Debate centred around whether this was deliberate, since denying voting to Netscape users would most likely bias the result towards Microsoft, or whether it was just incompetent. It was soon flushed out that the problem was with Netscape's buggy way of dealing with cascading style sheets. The Opera browser (which is as near standard as you can get in a browser) did render the questionnaire correctly, as did Mozilla M10 but not KDF. This begs the question as to whether MSNBC knew that Netscape had a problem in this area, which was exploited, or again, was just technically incompetent. It was noteworthy that the site proclaims that it is "optimised for IE and Windows Media Player" and is maintained by MSNBC Interactive News, One Microsoft Way, Fort Redmond. The problem was reported to MSNBC, and suddenly the applet was fixed for Netscape with Windows. Brock Meeks, the chief Washington correspondent for MSNBC, claimed after the bug had been fixed that the site did work for Windows and Netscape, but did not admit to the problem. He did admit however that it was impossible for Mac users to vote -- whether they used IE or Navigator. Considering all the facts, the most likely explanation is that it is not MSNBC's normal practice to test pages with anything but Microsoft software. It is probable that at least some people at the MS end of MSNBC knew that Netscape had a problem with CSS, and were happy to exploit this weakness. That the poll did not work for the Mac, even with IE, reinforces the evidence for incompetence. This is not the first time that Microsoft has played these kinds of tricks. When Microsoft acquired the Internet Gaming Zone, Mac users were deliberately barred, in the forlorn hope that they would give up their kit and shift to Wintel. Oh yes, the result of the MSNBC poll: of 24,000 votes, two-thirds thought Microsoft did have a monopoly, but half of these voters thought that no one has been hurt. So far as what should happen was concerned, 17 per cent thought that Microsoft should be broken up, 11 per cent thought Microsoft should settle, two per cent thought that the government should oversee the company, 12 per cent thought Windows should be licensed, 15 per cent thought Microsoft should be fined, and 43 per cent thought nothing should change. Of course, we don't know what Mac users thought. ®

Windows 2000 was an unexpected name for NT 5, as is seen from Microsoft's failure to check whether the trademark Windows2000 and the domain Windows2000.com might just have been previously claimed before it barged in. As it turned out, the domain was being used, and not by a cybersquatter but by Bob Kerstein of Falls Church, Virginia who has a business trading in stock and bond certificates for collectors (it's called scripophily, apparently). Kerstein, formerly an accountant, has concluded a deal with Microsoft whereby Microsoft gets the trademark and domain name, and Kerstein gets bob.com, which Microsoft had obtained in 1996, at the height of Bob's, well, failure. Kerstein thinks bob.com might be rather easy for people to remember. For Microsoft, 'Bob' is a name it would rather forget. Microsoft has been saying, by way of saving face, that Bob (a social interface in which Mrs Gates had involvement in her Microsoft days) was ahead of his time, but it looks as though he's been dumped for all time now. The Windows2000.com Web site now offers a choice: go to scripophily.com (mirrored at bob.com), or land up at Microsoft's Windows 2000 server home page. For once, it was all resolved amicably -- but Kerstein's not saying how much he received from Microsoft in "other considerations". ®

It's important that Microsoft's biggest rivals don't want to compete with Microsoft directly in the client space, because this fact is of deep significance to what the judge sees the problem as being. Prior to getting on to the juicy bits detailing sundry Microsoft hoodlumisms Judge Jackson's findings of fact define a relevant market. This is the market for Intel-based PC client operating systems, and it's the one Microsoft has a monopoly of, he says. He does not include servers, appliances, Macs (he gives the Mac a nod, indicating you might want to include it, but it still wouldn't matter much). Judge Jackson's relevant market is therefore precisely the market Sun et al don't think will be relevant in a couple of years time. If they wanted Windows source access they'd want it largely for use in products that are outside the relevant market, so from the point of view of injecting competition into the relevant market the judge should conclude they're not relevant. Got that? And although our friends in the open source movement could be in the relevant market, they're also outside it. By defining Linux as largely a server OS Judge Jackson defines it as largely outside, and understates its capabilities as a future desktop competitor. But Linus Torvalds himself has been taking about a future of lower footprint, appliance-style implementations. He seems to think Linux Everywhere will happen to a great extent via new platforms that obsolete the old Wintel model, and he's hardly alone in taking that view. If open source's future also lies outside the relevant market, then it's not a neat solution to Jackson's highly focussed version of the problem either. Is it possible to maybe promote a couple of Linux distributions in order to build competition in the PC client market in the real term? How could you do that without letting the whole thing escape, and turning into something much bigger than the narrow problem you meant to solve? What Linux distributors would be willing to co-operate in such an exercise anyway? The bottom line, as Jackson and the DoJ will no doubt find when they get to it, is that yes, Microsoft does have a monopoly, and does compete unfairly in the relevant market. But the relevant market is becoming history. This is actually what quite a lot of Microsoft testimony said, although the extent to which Microsoft really believes it to be true is doubtful. Any action Jackson takes is therefore likely to be a matter of shutting the stable door after the horse has bolted. The possibility of Microsoft competing unfairly in order to establish a monopoly in future markets might be addressed in any measures he takes to get a lid on the company's interesting business methods, but as Microsoft clearly doesn't have a monopoly in these markets yet, that's a tricky one too. Picture it in a couple of months time, after they've tried and failed to cut a deal with Microsoft. Judge Jackson, the states attorneys general and the DoJ reps sit around a table strewn with crumpled paper, abandoned scribbles and empty coffee cups. Joel Klein is snoring gently. Judge Jackson rubs his eyes, heaves a great sigh and says: "Screw it - why don't we just hang the bastards and have done?" ® Back to first part: Special report: If the judge opened Windows source, would anybody come?Complete Register Trial coverage

As far as Windows is concerned the needs of the OEM PC makers are pretty narrow, but promoting the OEMs as part of a solution might still attract Judge Jackson. No major PC OEM is going to want to licence a version of Windows built by a rival OEM, but if enough of them had the right to tailor their own versions it would make an impact, so it's a possible solution. One obvious difficulty, however, is where you draw the boundaries. If you just give access to say, the big five, you're promoting them unfairly above smaller rivals. But if you give general access, you're probably taking an axe to the whole Windows business. And what restrictions do you place on their use of the code? If you let them do entirely what they like with it, at least some of them are going to start using it in conjunction with non-Windows operating systems - that L-word again. Or alternatively, it brings us to class of 95 member number three, Sun. The ability to run Windows applications has been an on/off project of Sun's for years, and it's worth remembering that once upon a time Sun (with tongue approximately in corporate cheek) called for Microsoft to relinquish control of its Win32 APIs for the greater public good. Sun would still be very happy if this happened, but although there's an outside chance it would have been willing to run with a Windows clone as a desktop OS four years ago, doing so now would be in complete contradiction of its current strategy/propaganda. Sun thinks the PC is dying, that it'll be replaced by powerful servers and billions of appliances, so what the hell would Sun want to get into this doomed killing ground that is the Wintel space for? That's basically the bottom line for all of Microsoft's big enemies. In the mid-90s those who tried to compete head-on in the PC market failed, and in the intervening years they've developed alternative strategies designed to cut Microsoft at the pass. They won't want to compete directly at client level, because they don't see that market as having a future, and they're almost certainly right. ® Next part: Is the relevant market a dying market? Back to first part: Special report: If the judge opened Windows source, would anybody come?Complete Register Trial coverage

In 1995-96 a forced unbundling of OS and GUI, together with some form of source licence, would have been welcome to Novell, because it could then have continued development of DR-DOS as a desktop OS in the Intel space. Instead of this, the DR-DOS team have moved the OS into the low-resource and embedded arena. DR-DOS still exists, but it's running set-top boxes and the like, while the Intel space desktop OS from the stable is now Caldera's implementation of Linux. In an ideal world the judge's problems would be solved by the sudden emergence/construction of the kind of competitor Novell DR-DOS could have been four years ago, but that wouldn't work now. Caldera would no doubt still relish access to source today, but would want to use it to allow its Linux distribution to run Windows apps, and it would want to contribute it to the WINE project to allow Windows apps to run on Linux in general. So if the judge nominated Caldera for source access he'd be second-guessing the outcome of the Caldera antitrust suit, and quite possibly unleashing a considerably bigger dragon that he intends to. The punishment could turn out to be a lot greater than the crime, despite the fact that the judge's stated view is that Linux doesn't have the capability to overthrow Windows within the next few years. Of the other two candidates from the class of 96, IBM is the most obvious. It launched its last major offensive for OS/2 in the run-up to the Windows 95 launch, and at that point IBM would have loved to be able to offer the ability to run Win32 applications with OS/2, which it was then positioning as a consumer OS. We at The Register are incidentally of the opinion that it was IBM's own failures and incompetences that finished OS/2, and that even if IBM had source access in 1995 it would still have managed to blow it. There's certainly clear trial evidence that Microsoft set out to damage OS/2 in 1995, but by that time it was largely a case of jumping up and down on the bits. If IBM had been given access to Windows source in 1995 the company would still probably have got nowhere with OS/2. But today even the willingness to use the source to compete with Windows has vanished. In 1995 IBM would have wanted the ability to compete with Windows directly in the OEM market, but in 2000 it won't. If IBM were given source access today it would quite possibly take it, as would other major PC OEMs, but it would use the code to make relatively minor revisions and adjustments to its own OEM version of Windows, for its own purposes, and that's probably what the other big OEMs would do as well. ® Next part: Would promoting the OEMs fix it, or break it more? Back to first part: Special report: If the judge opened Windows source, would anybody come?Complete Register Trial coverage

The government's current position in the Microsoft antitrust case is that any settlement, whether imposed or negotiated, will have to address all of the problems identified by Judge Jackson in his findings of fact last week.

Virgin is promising to cut mobile phone bills by a third with the launch of non-contract phones from Virgin Mobile. Speaking at today's launch in London, Richard Branson said the company would offer a simple, one-tariff system without contracts. This applies to pay-as-you-go and billed customers. Virgin Mobile, a joint venture between the Virgin Group and One2One was announced in August as the ultimate antidote to rip-off Britain. "Does anyone realise how big a scam is out there?" Virgin chairman Branson asked. "Mobiles are now a way of life, but despite this, what's on offer is not very good. However you look at it, mobile phone users have been bamboozled and short changed." He spoke of a "confusing" range of offers and tariffs, adding that if everyone in the UK with a mobile switched to Virgin, they would save a combined £1.6 billion per year. Starting from tomorrow, Virgin Mobile will have one tariff. Calls will be priced per day -- the first ten minutes will cost 15 pence per minute, the next ten will be ten pence per minute, and the rest of the day is charged at five pence per minute. This excludes calls to other mobile networks, which will have a flat rate of 35 pence per minute. Customers will pay £12.50 for a one-off service pack, which includes a SIM card, phone number and £10 of free airtime. They will also buy their own phone, choosing from a range of seven models priced between £69.99 and £379.99. Optional extras will allow users to receive special offers on Virgin flights, travel information and email services. Virgin Mobile will sell the service through its 310 Virgin and Our Price music stores. It will also sell direct through its call centre and over the Web. Tom Alexander, Virgin Mobile MD, said: "The wireless multimedia is crying out for clarity and a fresh approach." Today's 50:50 venture with One2One will "shake it up a bit", according to Alexander. Virgin is spending £20 million on the advertising campaign, and expects to have invested around £50 million before seeing a return in the company's second year. It expects to sell one million phones in the next 15 months, with 300,000 of those moving over the Christmas period. Alexander said the company would be looking at WAP technology, but would not be bidding for one of the upcoming UMTS licences. On his choice of One2One, Branson said the company was "braver" than the other networks, and would let Virgin Mobile compete direct in the market. He dismissed claims that the operator had problems with its network capacity, saying the company was currently spending £2 million per day to improve its infrastructure. ®

Compaq's iPaq may not share the iMac's colourful casing, but the principles behind are exactly the same: provide a cheap, task-specific (in this case, Internet access) PC in an attempt to save the vendor's bacon. It certainly appears to have worked for Apple, but will it work for Compaq? The key to the iPaq is not its iMac-soundalike name, nor is abolition of 'legacy' components (not least since one the iPaq's two configurations doesn't eliminate them -- clearly Compaq prefers to play it safe than really push the legacy-free point), but Compaq's focus on the corporate market. In that respect, it resembles Sun's network computers of old and its new Ray than Apple's consumer computer. Compaq CEO Mike Capellas' plan here is to sell bucket loads of the $499 computer into corporates. It sounds a smart idea: ditch all those huge, ugly beige boxes, and replace them with slimline, cheaper boxes that work the same way but look nicer and offer fewer cables to connect -- just a USB keyboard, a monitor, Ethernet hook-up and power -- and without any of those horrible CD or floppy drives for employees to install unauthorised apps. So far, so good. Sun's Ray, which contains even less parts that the iPaq, ships for the same price and is essentially a graphics terminal for apps running remotely on a server. iPaq at least has its own CPU and storage, but it's clearly a move closer to the network computer than previous Wintel PCs have come. Compaq is playing the Total Cost of Ownership game here, and will no doubt soon stress the iPaq's support for Windows 2000's centralised management features. The trouble is, the last time the TCO card was played, by Sun, it pretty much failed. As a whole, corporates didn't switch from desktop PCs to NCs or terminals, and it's hard to imagine them doing so now. What has changed since then is that the Internet is now rather more important to business than it was before. Compaq reckons that next year 15-20 per cent of corporate PC orders will request Internet-oriented machines, rising to 50-60 per cent over the next couple of years. And some potential buyers probably are dim enough to imagine that a sexy client is what corporate Net access is all about, rather than the firewalls, proxy servers and Ethernet connections the rest of us were working with. After all, what's the essential difference between an iPaq running Windows and Internet Explorer and, say, an eMachines box running Windows and Internet Explorer? Answer: nothing at all, not even the price. And the only thing revolutionary about the iPaq is its price -- and not because it's $499 but because it's Compaq offering a cheap PC, something it would never have done before. The iPaq is just a cash-in product -- cashing in the iMac-inspired notion that a pretty case guarantees sales and on business' new-found interest in e-everything. ®

BT's sparkling bid to slash the cost of dial-up Net access to service providers is rapidly losing its lustre. Energis, the telco behind Freeserve, claims that BT has not come clean about the true cost of the new service to ISPs. Not only will there be extra charges over and above what BT has already published, Energis claims BT will also force ISPs to pay additional connection costs. "All in all, ISPs will incur additional charges," said Andy Speller, a spokesman for Energis. He said the true cost to consumers of BT's new offering would most likely be in excess of £20 a month. "This might appeal to a niche group, but it's not going to fundamentally alter the dynamics of the ISP market in the same way as Freeserve did," said Speller. "At best, what BT has done is evolution -- it's certainly not a revolution," he said. Elsewhere, AOL UK maintained its pressure on the monster telco saying BT new wholesale offer to ISPs will not deliver flat-rate Internet telephone tariff. Nor will it meet consumer need for an end to metered access. "BT has recognised that the cost of Internet calls is currently too high and must fall dramatically," said the MD of AOL UK, Karen Thomson. "But the tariff proposed is clearly not a true trade flat-rate tariff. While it is a step forward, we are disappointed that BT has not grasped the tremendous opportunity to respond fully to consumer demand by opening up Internet access in the UK at affordable flat-rate prices." "While we will obviously evaluate BT's proposals once they are published in full, we are also concerned that the new tariffs do not remove any of the financial risk for ISPs wanting to offer flat-rate access. This could therefore force ISPs to levy a high monthly charge to consumers, potentially creating an Internet elite, furthering the digital divide and risking the creation of a true online mass medium," she said. ®

Call it Anglicising the Web, a recognition of UK culture or just plain old commonsense, but the Web is starting to become really useful with the launch of two online off-licences. One, by high-street store Oddbins, has been set up to cash in on a champagne frenzy for the New Year. Going for your classy consumer, the site offers 60 types of champagne but will expand next year to cover the full range of beers and wines. Second up is Lastorders.com, which has gone for the lad approach featuring a lingerie-clad tippler and big pics of beer bottles. It's done a deal with lastminute.com and confetti.co.uk to boost traffic and does a grand job of reflecting Britiain's obsession with booze. However, much as The Register applauds such enterprising behaviour, a look at the prices caused shock and dismay. The main disadvantage with selling beer online is that it's not expensive and it is very heavy. And it seems as though delivery costs have been tied into the price. We urge you to sort this out as fast as possible. In the meantime, we're off down the pub. ®

The Web site closed down after its ISP had been warned by the Lord Chancellor's department of its "offensive" material has proliferated on the Internet following media attention. The site, run by James Hulbert, accused five judges of acting corruptly. Following the site's removal, however, several parties, including Hulbert, mirrored it on their own servers, greatly increasing exposure. However, despite The Register's attempts to allow the Lord Chancellor's department to comment on its "own goal", a senior representative refused to acknowledge that the situation had changed - at one point denying that repetition of libel was itself an offence.* Incredibly, the Lord Chancellor's department did not believe the multiplication of the site would increase the degree to which the accusations entered the public domain (thereby going against the wording of the law itself). Not content with this logical paradox, the representative then informed The Register the matter was not of public interest. The Register believes that the use of judiciary powers to stifle an individual's opinions is very much in the public interest. Are we wrong? Put your comments to us. ® * Further information: Given the Lord Chancellor's department's assertion that reporting Hulbert's comments is not actually a repetition of libel, The Register now feels confident enough to point you in the direction of some of the allegations.

Scottish ISP, 08004u, shut down its 0800 access service last night after being overwhelmed by 22,000 Net users who gained unauthorised access to the unmetered service. It appears details of how to gain access to the service while bypassing the £49.99 a month were circulated on newsgroups giving some Net the opportunity to run amok at the ISP's expense. 08004u took the nuclear option when it became clear that those Net users who had subscribed simply couldn't get onto the service. A spokesman for 08004u said the service would be up and running again at the weekend although he added that its 0845 local call rate service was unaffected. In the meantime, 08004u is busy snail-mailing new dial-up details to its 0800 users. Apparently, each subscriber is to be issued with their own distinct 0800 number. Really, that's what he said. And anyone found guilty of passing on these personalised details will be liable to pay the cost of any unauthorised access gained elsewhere. Asked about the 22,000 people, who were effectively thieving from 08004u, he spokesman said: "There's not a great deal we can do." He wouldn't be drawn on whether those people who leaked the details in the first place will also be hounded for the outstanding money. ® See also:08004u shrugs off legal action08004u MD coughs up to poor service08004u publishes customer records by mistake

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Microsoft has struck a five-year deal with Tandy's retail outlets in the US to push high speed Web access. The software vendor will start a "store within a store" in up to 7000 Radio Shack shops in the US. It will use Radio Shack's 25,000 staff to demonstrate and sign customers up to its MSN dial-up or broadband access. Microsoft hopes the deal will speed up the adoption of its high-speed Internet access products, the company said today. For Radio Shack, it will provide extra business in wiring up homes and small businesses for the service. The range of Microsoft products and services available in the stores will include MSN Internet Access, Microsoft WebTV Network services, Windows CE-based handheld devices, MSN mobile solutions and Microsoft home networking. Customers can sign up for narrowband or broadband MSN Internet service and will be able to access a version of MSN co-branded with Radio Shack. "This model for convenient, one-stop shopping will allow us to greatly accelerate America's conversion to broadband services," said Bill Gates. Microsoft also said it would invest $100 million in Radio Shack's Web site. This will involve beefing up the infrastructure for radioshack.com using Microsoft's technology, which is also used for Web sites including Monster.com, 1800Flowers.com and SmarterKids.com. ®

Go figure - if you can sell one bit for this much, how long can you keep the stockholders from wanting more?

Microsoft's Expedia IPO closed at $53 yesterday, up from the $14 offer price which had been hiked from the original $10 to $12. It marks a rally in IPOs and shows underlying strength in the travel sector in particular. At the close, the gain was 277 per cent, but at one point, it reached 471 per cent. Microsoft sold just 15 per cent and made $72.8 million for Expedia. Expedia had a market value of $535 million when trading started yesterday, $1,482 million at the end of the day. Expedia has a cumulated loss of $92 million, with revenue in the last quarter being $15 million. There is already serious competition in the travel market leader, with Sabre Holdings/Travelocity (up 7.5 per cent yesterday, on the news) that is about to acquire Preview Travel, which itself rose 17 per cent yesterday. Travelocity is spending $100 million on its website. Sabre is a member of the ProComp anti-Microsoft lobby and has expressed concern about the association between IE and Expedia. There was no mention in the revised prospectus of the legal problems that Microsoft faces, but in view of the publicity, it is unlikely that any private action against Microsoft would be successful for not disclosing this. The success of the offer gives some pointers as to market enthusiasm for how pieces of Microsoft might be regarded, although the sheer scale of any Microsoft breakup would make such a premium most unlikely. Nevertheless, Microsoft investors would probably do very well on break-up, especially if Microsoft itself decided to do this without any compulsion from the courts. It would be a bold step, but it could avoid ignominy. The message from this IPO for Microsoft shareholders must be that there is more value in break-up than in Microsoft itself, especially in view of the drifting share price over recent months. Expedia CEO Richard Barton was allowed to convert his unvested Microsoft shares to Expedia shares, giving him a gain on the day of $40 million. Lucky for some. ®

Stuff from the shareholders' meeting you probably didn't read elsewhere...

When he was talking to shareholders yesterday Bill Gates didn't just deal with the trial. Remember this is probably the most favourable audience he could ever had (so long as the stock price stays up), so they get to ask serious questions, and they get answers that are a cut above your average press conference. That process threw up some interesting data yesterday, and we were watching. Office in the browser A questioner at Microsoft's AGM yesterday wanted to know why Office, Word and Excel couldn't be made functions of the browser. Ah, said Gates, "We actually have two product lines there, we have Windows and we have Office. And they're two separate revenue streams... We keep Office separate because it's the high powered productivity tool, it's a separate revenue stream, and it makes sense that some Windows users want that, some Windows users don't want that... But, actually, the high level of functionality that's in Office, it makes sense for us from a business point of view, and from the users point of view, that we retain that as a separate offering." So much for the tighter integration argument for the browser. It's a shame that nobody asked why IE was not also a revenue stream, just to hear what he'd say. Bad lawyering A shareholder expressed his "feelings of disappointment at best that I had, and of humiliation at worst that I had in how the case against Microsoft was handled by our counsel. I'm very concerned. I'm very concerned that the quality of our company is not reflected in the quality of our counsel. And I would ask that the board take a strong look at shifting our approach to the legal situation that we find ourselves in, so that we are not outrun and out-manoeuvred by the government." There was applause at the question, and Gates responded, rather than legal counsel Bill Neukom. Because his response was unscripted, it probably gives better insight into his views, so here's his response in full: "I think it's pretty important in a case like this not to look in a very superficial way for someone to blame, or some way that this could have been done differently. We sit a lot at the company and talk about, how did we get into this situation. And one of the most defensible things we've ever done is the support of the Internet in our operating system. And we cannot back off on that. It's something that's very important. And when the government decides that they're going to block that innovation, your own government decides they're going to take you to court and say that you shouldn't make those kind of advances, it's not going to be a pleasant experience. It's not going to be something that anyone should have to go through. "You know, at every step of that process there was an attempt to distract from the core issue, whether it was taking emails, or meetings, or various things, to distract from the fact that what they're really saying we've done wrong, and if you read the findings of fact it becomes pretty clear. It's because that browser was attractive, there was another product that was distributed somewhat less, because they didn't keep up in terms of those kinds of advances. And so I think you can ask yourself how we got into it, but it's really the government that made the decision to block those innovations. And Microsoft is a very self-critical company. "We can certainly look back, whether it's the statements we've made, the style of various things, and say, in retrospect could we have been smarter about that? But, I'd say that what we've done, in terms of how we've conducted this case, the employees who went there to testify, the way that we put forward the story through our internal and external counsel about why our work is good for the economy, good for consumers, I'm quite proud of the work that's done there. And I'm really quite supportive of what's been done, and we're going to continue to tell that story, because it's a very, very important story, and we really ask your support in that." Note that there was no direct response to the question, just some stuff about innovation. Linux and browser-based computing Gates was asked about devices that go straight to the Internet, bypassing the PC, and how these devices - and Linux - would affect the PC business. Gates regarded the two as "very potent sources of competition" and specifically mentioned devices that would go to AOL specifically. Some of them are on Linux, he noted, while others ran on other code. He continued: "It's important for Microsoft to make the value of Windows, which will make the device modestly more expensive, on the order of, say, $70 to $90 more expensive, that the value you get in terms of being able to run the applications..." It seems pretty clear (remember he's talking to the shareholders) that Microsoft is still focussed on getting that $50 fee from everything that goes out the door. Bill, and Microsoft, still don't get it. Gates mentioned WebTV, but so far as the competition was concerned, he said Microsoft would "rededicate itself to making Windows easier to use, and having the value that justifies Windows being on those devices." So far as Linux was concerned, Gates said: "In terms of Linux, in general, there's a lot of different versions of that out there. There's no sort of centralised control. But, it's definitely a competitor. This is a piece of sort of public domain, open source type software. And, again, the challenge to us is to advance Windows in ways that through our innovation and testing makes it preferable to that choice that's out there... we're challenged now... as we deal with those competitors." With an understanding of Linux like that, and the promise of all that innovation and testing for Windows in the future, it looks as though the Linux community can rest easy. ®

A semiconductor analyst has written a piece about Rambus and synchronous DRAM which appears to damn the former and praise the latter. Bert McComas, over at InQuest, has posted a lengthy piece comparing the performance between DDR (double data rate) memory and Rambus. According to McComas, there is no perceptible performance benefit from moving to the Rambus platform, despite vaunted figures flourished by Intel at its last Developer Forum in September. The critique is bound to spark further controversy about whether Rambus is really a technology end users need. ® *We'd have written this one earlier, but we were in Ypres, looking at a joint venture between Lernout & Hauspie and Intel. When we got back to famous London train station Waterloo, an over officious customs official detained us while he checked out our aspirin bottle to see whether the pills inside were prohibited substances. Of course, they weren't, and aren't...

Techsearch LLC, which earlier this year threatened Intel with all sorts of dire consequences, seems to have won the first round in its legal fight against the chip giant. The patent in question relates to technology first designed by a firm called International Meta, which was originally under the wing of Apple. International Meta went belly up and Techsearch LLC took over the patent, despite heated opposition from its shareholders, who lost cases against the lawyers earlier this year. Intel had attempted to buy the patent using a shell firm based in the Cayman Islands, with those attempts exposed first in the Wall Street Journal. Although the law suit filed by the law suits against Intel was originally for $2 billion damages, that amount has now been upped to $8 billion damages. The Techsearch LLC case will now go to a further hearing. Intel maintains that the law suits are without merit. A representative from the firm attempted to play down the case. He said: "The judge issued a Markman ruling to determine the proper definition of various elements of the patent claims. These hearings are common in patent infringement cases. A Markman hearing is routine in patent cases such as this one and is a necessary procedural step before the judge or jury considers validity or infringement issues." ® See alsoIntel's IA 64 programme threatened by IMS patentMeta Smalltalk Patent Suit assumes Merced meaningIntel, Teachsearch, IMS case takes further twist

A conference call between analysts and chip firm Advanced Micro Devices has confirmed that a 750MHz Athlon is close to the starting gate. AMD told the analysts that it had managed to produce a 750MHz Athlon ahead of all expectations, but also said that the average selling price of its flash memory had suffered degradation. Top tier OEMs will ship the Athlon 750MHz part, as revealed here earlier, while some analysts are speculating that AMD may break even this quarter. Rob Herb, an AMD executive, used The Register's own words to describe opposition from Intel with its Coppermine parts. We said Coppermine was "A processor you can't find, for a platform that doesn't work, with memory you can't afford". Herb repeated those words. AMD has also successfully moved to .18 micron technology and will be able to deliver 800MHz, 900MHz and 1000MHz versions of its Athlon very soon. Our sources tell us that AMD could do most of this tomorrow, but it does want to maximise its profits. We will report full details of the analyst meeting tomorrow. ® See alsoAMD pumps up Athlon speed to 1GHz for Comdex